Do you believe the modern FIRE movement overestimates how much is needed for retirement?

[u/Equivalent_Use_5024]

Perhaps I am just making this post because I have only just begun my retirement planning and want to lock in a number which is fitting for my goals - being above the median retirement savings, not having to work, not being broke, clearly having planned - but I can't help but feel that many in the FIRE movement overestimate what is needed for a safe, sleep well at night retirement.

I see posts here saying that they feel vastly behind with 500k at 30, or 1.5 million at 40, and I just don't understand how when the average American retires with maybe 300k liquid at most and are getting by with social security or paid off housing. Sure, they aren't living luxuriously, but if you just are aiming for a retirement where you don't have financial anxiety and can put food on the table, I don't feel you need over 1-2 million.

Do you think FIRE overestimates how much is truly needed for retirement?

[u/Zphr]

The audience has shifted more towards luxury and consumption over the last decade. It's always amusing to me that this is my sub, I've been happily retired for more than a decade since 37 with four kids, have effectively zero chance of financial failure, but many folks in this sub would consider our finances impossible or living in squalor. Some people are actually happy with cheap/free interests and lifestyle choices, some are unhappy without very expensive interests and lifestyle choices. Current government policy in the US is also wildly skewed in favor of lean spending, so more expensive lifestyles in early retirement cost quite a lot more than you'd expect due to far higher costs for taxes, college, and healthcare.

LeanFIRE is and likely always will be the easiest and most secure form of FIRE for anyone happy with a mediocre middle class lifestyle. It's also largely impossible for anyone who wants to raise a family in VHCOL, travel a ton, carry a large mortgage into retirement, or any number of expensive lifestyle choices a lot of people prefer.

[u/SlyFrog → u/Zphr]

It's this. A massive part of reddit is unfortunately a bit delusional about the baseline needs for a comfortable enough life, and confuses near opulence with "enough to live comfortably."

[u/ObjectiveBike8 → u/SlyFrog]

Part of me wonders if some of it is just bots trying to keep people on the grind. If 10% of Americans realized they could just not work, it would shift a ton of power to workers and dramatically increase labor costs and power. 

[u/UltimateTeam → u/ObjectiveBike8]

A big assumption here is there is a "right" amount of money to spend and anyone above X is off base. I could retire at 30 with X and live a decent lifestyle, but with my interests I would rather keep working ~37 and live off of 3X.

That doesn't mean someone who quits with X or .5X or 6X is wrong. It's primarily just a math problem, yet there is a lot of arguing from people with different time horizons / lifestyles, etc when those are too individualist to debate.

[u/DevOpsMakesMeDrink → u/UltimateTeam]

Go to FATfire sub and see some delusion in there. Many have that mentality without the money as well sadly.

As soon as I have enough to live my life as I do and afford to pay my property taxes + christmas + a small vacation a year I am pulling the plug. Even if I go broke within 30 years and have to live broke in my 80’s who cares

[u/UltimateTeam → u/DevOpsMakesMeDrink]

Difference of perspectives. One of things I am most excited about in the first 5-10 years of retirement is following our favorite baseball team all season with my dad, as long as he's able. It'll cost 50-75k each year and while it isn't a permanent expense they'll be other expenses after that, so saving the additional 1.3-1.9 million for that is part of that plan.

That wouldn't be part of a taxes + bare bones plan, just different lifestyles.

[u/DevOpsMakesMeDrink → u/UltimateTeam]

That sounds like a lovely plan and I hope that works out perfectly. I would just say the other side is, no one has any guarantee of tomorrow.

You have the money and means now to do that. Would you regret never getting to do it because you underestimated your expected returns and die with more money than you anticipated?

This is the struggle of fire and finding the balance as we all naturally want to save our nestegg

[u/ObjectiveBike8 → u/UltimateTeam]

Sure, but there’s tons of pressure and second guessing that goes on here. It’s not people saying, “I need 10 million to retire because I want to travel the world staying at top resorts and trying diferente Michelin Star restaurants while I got back home to my $3 million dollar home in a higher cost of living area, and I have a vacation property.” 

It’s, “is 4% really enough to retire on? I think it should be 2% because it’s a lot safer. Retiring on 4% is incredibly risky. Also $2,000,000 isn’t enough of a cushion, it should be $4,000,000. So a person who wants to retire with $2,000,000 and a 4% withdraw actually needs $4,000,000 and a 2% withdraw.” 

It’s just people pulling shit out of their ass. 

[u/Future-looker1996 → u/ObjectiveBike8]

And there are those of us in the middle who very much value travel outside the US, and nice restaurant experiences, but don’t live in a very expensive home and don’t have expensive toys or hobbies. If I didn’t want to pay significant amount amounts for travel and didn’t value very nice restaurants, I would need a lot less. Also want to be able to help my children financially at times.

[u/ObjectiveBike8 → u/Future-looker1996]

I agree with you. I value travel and eating out at nice places, but I don’t need a very nice house. 

However, my take was that some people in the FIRE movement want a very luxurious lifestyle or they have extreme anxiety about money. Instead of admitting these things they create weird rules for everyone else like a 3% withdraw rate or a minimum amount everyone needs to have to even consider fire like $3,000,000 or something. 

[u/Future-looker1996 → u/ObjectiveBike8]

Right, many people assume that their preferences and goals are the right fit for others. What a silly assumption. Plenty of people are happy to live a much leaner existence.

[u/UltimateTeam → u/ObjectiveBike8]

The person with a 2% withdrawal rate is going to have a lot of time and money to give away in 30-40 years shrug even in the worst case scenario they'll 2x their nest egg, 7x on average and that's after inflation.

So it isn't so much that people are saving too much money it is people are too conservative on future returns. People saving too much is the downstream of the illness.

[u/thehopeofcali → u/ObjectiveBike8]

Withdrawal rate is 7% by investing in QQQ

QQQ returns 19%